S. African Businessmen Relieved at Mild Curbs

While the South African government Tuesday angrily denounced the decision by the European Communities to impose economic sanctions on the country, businessmen here were clearly relieved that the sanctions adopted were so limited.

Despite the new European bans on imports of South African iron, steel and gold coins as well as an end to new Common Market investments here, share prices on the Johannesburg Stock Exchange climbed to record heights Tuesday afternoon, and the beleaguered South African rand rose against the U.S. dollar and other foreign currencies.

The sanctions affected only 6% of South Africa’s $9.2 billion in exports to the 12-member European Communities and less than 1% of its exports worldwide, economists here said, adding that far more severe measures had been anticipated.

Fears Curbs May Spread

The European Communities, at the insistence of West Germany, excluded coal exports from the trade ban and thus ensured South Africa continued European markets for its coal, the country’s second-most important export after gold. West Germany argued that a ban on coal would lead to the layoffs of black coal miners.

“The danger is that these measures, however limited, will spread to other countries, such as Japan and the United States, and that they will be followed by tougher and tougher measures,” said Sam van Coller, director of the Steel and Engineering Industries Federation of South Africa. “Although limited, the blow is a serious one to the steel and iron industry here, and it will have an impact throughout the economy.”

Other business spokesmen said that the European Communities’ decision not to prohibit imports of South African coal, as many here had expected, will in the short term probably boost, rather than undermine, sagging business confidence here and persuade more people that they can weather the international sanctions campaign.

South Africa has found alternative markets, albeit at lower prices, for its steel and iron, according to industry sources, but its coal exports, already among the world’s cheapest, would be difficult to sell in a glutted market.

South Africa’s attention is now focused on the United States, where President Reagan is threatening to veto legislation imposing more severe sanctions and Congress is threatening to override his veto. Japan is expected to follow the lead of the United States, South Africa’s No. 1 trading partner, and impose similar sanctions at the end of this month.

President Pieter W. Botha, speaking here this week at an international conference on gold, declared that his government will not be forced by economic sanctions, however great the pressure, to accelerate the pace of its gradual reforms or to give in to black demands for a “one man, one vote” system of majority rule.

Although there is apprehension about the country’s future, Botha said, “it is a fear instilled by those who are at present bent on the destruction of our economic well-being by means of ill-considered punitive action against us.

“They, with their stupid march of folly against my country, are playing into the hands of revolutionary forces and power-drunk cliques, and that can only bring misery, poverty and hunger to many millions should they succeed.”

Foreign Minister Roelof F. (Pik) Botha on Tuesday repeated Pretoria’s warnings that those countries imposing punitive economic sanctions on South Africa would have to “accept responsibility for the suffering and hardship that sanctions will undoubtedly cause” among the country’s black workers.

No Counter-Sanctions

But Foreign Minister Botha, who is not related to the president, emphasized that South Africa will not retaliate and impose countersanctions, either on the European Communities by cutting off supplies of key minerals or on South Africa’s black-ruled neighbors.

“The South African government remains unequivocally opposed to sanctions,” Botha said amid continuing calls here that Pretoria use its “mineral weapon” and deny the West such important metals and minerals as platinum, manganese and vanadium. “We will not initiate sanctions against other countries, nor will we impose punitive measures purely for the sake of retaliation.”

The government, meanwhile, announced plans to convene a special conference of business and political leaders in early November to discuss not only South Africa’s economic strategy to cope with the sanctions but the prospects for further political reforms.